Hypocritical Lobbying Group Has A New Target: Me

“Americans For Fair Skies” published a story today entitled “He may love points, but Ben Schlappig doesn’t get the point of the Gulf carrier subsidy fight.”

Now, I know exactly what they’re doing here.  They’re going for earned media, because why pay for advertisements when they know I’ll write about it here, and they’ll get publicity from it? And they’re right. I’ll take the bait, because this is just too fun.

What is “Americans For Fair Skies?”

“Americans For Fair Skies” claims to be a “grassroots group of concerned Americans” that’s “financially supported by thousands of concerned citizens.” It’s led by Donald Lee Moak, a former Delta captain and former president of ALPA (the Air Line Pilots Association).

Based on their 2015 tax return, the organization raised about $5.3 million over the course of nine months. They had a budget of $3.2 million over that period — $2.1 million went to advertising, $1 million went to the president’s consulting company (Mr. Moak seems to have quite an incentive to keep this going), and $100,000 to “others.”

Fair Skies has refused to reveal how much of their donations come from “concerned Americans” rather than, ahem, concerned airlines.

It seems to me like the Gulf carriers might not be the only ones that are heavily subsidized by organizations with bottomless pockets around here.

In the interest of full disclosure, I’ve never been paid a single dime from a US carrier or Gulf carrier.

What their response is in reference to

“Americans For Fair Skies” refers to the post I made regarding the self-proclaimed documentary (but more accurately, propaganda piece) that was published a few weeks back. Here it is:

Here’s why they take issue with me

First of all, “Americans For Fair Skies,” I’m happy that the copy & paste function on your computer still works. With how often you recycle the same inaccurate catch phrases, it’s a miracle that the “C” and “V” buttons on your keyboard haven’t worn out.

To summarize their main points here:

  • I’ve bent the narrative, have taken aim at American workers, and have failed to understand the importance of the campaign against the future of US aviation
  • For every route lost to a Gulf carrier, 1,500 good-paying American jobs are lost
  • Labeling the video as “propaganda” does a disservice to the people whose lives depend on the success of US airlines
  • If we don’t take action, the airlines will go the way of the maritime industry and rapidly disappear
  • The consumer takes a hit because of the Gulf carriers, because the flooding of existing routes creates a loss of expansion opportunity for US airlines, and puts shorthaul flights in jeopardy, which are dependent on longhaul flights for revenue
  • The US carriers want to provide “more options, more routes, more access to countries like India”
  • US airlines welcome competition and they want consumes to have a choice

My response

Let’s address just a few areas they bring up:

Jobs, jobs, jobs!

They love pointing out how each route lost to a Gulf carrier costs “1,500 good-paying American jobs”. Out of curiosity, how many routes are they going to claim have been lost to Gulf carriers? Let’s say maybe Newark to Dubai and Atlanta to Dubai? 3,000 jobs maybe, using this logic?

Since this is all about good-paying American jobs, how many good-paying American jobs do you think are created by all the Boeing aircraft that the big three Gulf carriers are ordering? You know in the video how you shamed them for how many new planes they ordered (while seemingly not understanding that Qatar isn’t in the UAE)?

Oh, speaking of the importance of American jobs, how many widebody planes does Delta have on order from Boeing? Z-E-R-O. Not a single one. They do have 49 on order from Airbus though. What happened to the priority being good-paying American jobs?

Since this lobbying group is throwing around some numbers, let’s throw around some numbers from Emirates. According to a study by Campbell-Hill Aviation Group, Emirates supported more than 104,000 American jobs and contributed $21.3 billion in revenue to the US economy, including $10.5 billion to the country’s gross domestic product, and $6.4 billion of labor income in 2015.

While we’re at it, should we talk about how Alaska, Hawaiian, and JetBlue seem quite happy with the partnerships they have with the Gulf carriers? The Gulf carriers are helping them fill seats, and creating good-paying American jobs.

If we don’t take action, the US airline industry is at risk

Show of hands — how many of you are concerned about the US airlines going out of business? Just last week Delta announced their second quarter profit of $1.85 billion, which is a $172 million increase from the same quarter the previous year. That’s despite a $125 million operational disruption.

You know why the US airlines are doing so well? Because they’re charging us for everything, from checked bags to not being miserable (aka basic economy). But you want us to believe that consumers are taking a hit because of Gulf carriers? Really?

The suggestion that domestic routes would disappear due to international routes being discontinued is preposterous as well. Due to the fee environment in the airline industry, airlines are performing perfectly well on domestic routes. The demand for domestic travel isn’t going away, so I think many of us would be perfectly happy seeing some more competitors enter the industry.

Or maybe they’re suggesting that the domestic routes at risk are the government subsidized ones?

US airlines welcome competition and want customers to have a choice

LOL!

Here’s the real problem

A lot of people seem to accuse me of taking one side or the other. Some suggest I’m overly supportive of the Gulf carriers (and I can see why they’d say that), and some suggest that I’m overly supportive of the US carriers (seriously). I call out the the Gulf carriers when they’re in the wrong, I have a lot of problems with how business is done in the Middle East, and I think Qatar Airways’ CEO is a babbling clown.

Here’s my real issue — I don’t necessarily disagree with the argument that I think the US carriers are really trying to make.

The problem is that they haven’t once actually tried to make that argument. Not a single time. Is this an actual policy issue? If the US carriers really believe that government subisidies in airlines are illegal:

  • Why do they continue to accept US government subsidies on many routes?
  • Why do they specifically target Emirates, Etihad, and Qatar, and not the dozens of other airlines that are part of the Open Skies agreement and are government subsidized?
  • If they truly believe that these airlines are doing business illegally, then why does American continue to partner with both Etihad and Qatar?

If the US carriers wanted to say “we want to look at the role that government subsidized airlines play in the Open Skies agreement,” I’d support that. I think there would be validity to it.

But that’s not the argument they’re making.

They’re suggesting that US airlines are at risk of going out of business, while the airlines record their biggest profits ever.

They’re suggesting that consumers are losing out because of the Gulf carriers, when in reality we like having the choice, the additional routes they open up, and overall aren’t too pleased with the state of the US airline industry.

They’re suggesting that we won’t be able to get our military where they need to go if the Gulf carriers aren’t stopped.

They’re suggesting that the most important thing is American jobs, while forgetting the hugely positive contributions that the Gulf carriers make to the US economy, including the number of planes that they order from Boeing to fly around the world (while Delta doesn’t have a single widebody plane on order from Boeing).

They’re suggesting that government subsidized airlines are illegal in the context of Open Skies, all while American continues to partner with Etihad and Qatar, Delta continues to partner with Saudia, United continues to partner with Singapore, etc.

That’s my challenge to these lobbying groups — stop with the propaganda, and stop with the sensationalism. Give us an actual rational argument and thought to support, and we’re right behind you.

Until then, I’m going to keep calling you guys out on this garbage…

Comments

  1. They don’t like being beat at their own game. I wonder if Qatar is going to buy more Boeing aircraft after the recent debacle. Didn’t they just cancel some airbus orders?

  2. Well said. Keep hammering these clowns. Glad to see your commentary has caught their attention.

  3. Can’t wait to see what Gary’s response to this will be. I’m sure he’ll have some pointed words in a well-crafted missive calling out the US3 on their bullshit.

  4. Why hurt someone who votes with his wallet? Seems kinda like shooting yourself in the foot

  5. They’re attacking you because their Delta “Our Fight” video got pulled for the 99.9999% dislike rate. I hope one of the ME3 takes a stake in JetBlue or Alaska.

  6. I believe Emirates and Ethiad should be banned from the US, but not because of the propaganda American For Fair Skies puts out. It’s because the UAE created drama in the Middle East by hacking Qatari media, which of course lead to the current crisis. This area of the world does not need any more drama and the UAE and its precious airlines should be punished for their brat child behavior. I won’t be flying Emirates or Ethiad as a result unless full relations with Qatar are restored.

  7. Quick, someone do the math on this:
    1. Count number of international routes flown by UA, AA and DL
    2. Multiply by 1500

    My hunch is that if you did this, you would get a number that is larger than the combined workforce of AA, UA and DL.

  8. @ Ben — When I transited AUH yesterday, I wondered exactly where the US could possibly host a massive international hub operation like those at DXB, AUH, and DOH. Most US hub airports already operate at or near capacity, so where exactly would all of these routes, jobs, etc. be added if the ME3 weer killed off? Delta has blatantly stolen billions of dollars from its long-time loyal customers by devaluing tits miles by 75%, but some how that is OK? Delta is run by a bunch greedy jerks, and I can’t wait to watch them fall on their face when we have the next recession. Screw all of them.

  9. Some quick googling says there are about 280k employees of AA, UA and DL. If they have more than 186 routes, then there would be a negative number of employees operating the domestic flights.

  10. “Why do they continue to accept US government subsidies on many routes?”
    – Because US subsidies are tiny and aimed at incentivizing a carrier to provide service to an area that would not get air service. Not so that they can buy 500 planes and flood every route to drive foreign carriers out of business.

    “Why do they specifically target Emirates, Etihad, and Qatar, and not the dozens of other airlines that are part of the Open Skies agreement and are government subsidized?”
    For the same reason you would target the person who egged your car 42 billion times on Halloween over the people who egged it once.

    “If they truly believe that these airlines are doing business illegally, then why does American continue to partner with both Etihad and Qatar?”
    Why does this matter? Really?

    Look, I realize nobody feels bad for big bad airlines, banks, oil companies, or basically any big business. And I don’t think it’s right for them to target you personally. I understand why they are just resorting to puff pieces and attack mode and it’s because the underlying topic is too complicated to explain to folks who aren’t up on their international trade economics. But in all seriousness, they are right about the underlying subsidies being a massive threat. I’m not really sure what words can be written to finally convince you guys you have this wrong, but I imagine a war of words with open skies people isn’t going to help open your mind to the possibility you are wrong.

  11. Congratulations Ben! You know you’re playing in the major leagues once the lobbying groups come after you.

  12. I’m not sure I agree with every point you make. But I damn well agree with the way you make them. A measured, sensible, sane response to some insane and irrational criticism. Bravo.

  13. Good post. Can’t believe they thought it’d do them any good to divert attention to a person with a valid argument.

  14. Best post yet, Ben! Thanks for being a great advocate.

    Personally, I think some of your competitors (i.e. TPG) wouldn’t even touch this issue. I’m proud to read your posts as they are authentic, and have solid opinions.

    Keep up the good work and thanks for what you do!

  15. @Rob…

    “Why do they continue to accept US government subsidies on many routes?”
    – Because US subsidies are tiny and aimed at incentivizing a carrier to provide service to an area that would not get air service. Not so that they can buy 500 planes and flood every route to drive foreign carriers out of business.
    ***Flood every route? Please provide numbers of route overlaps operated by the ME3 and the US3 and numbers showing which airlines have pulled out of which markets as a result of an ME3 carrier joining.

    “Why do they specifically target Emirates, Etihad, and Qatar, and not the dozens of other airlines that are part of the Open Skies agreement and are government subsidized?”
    For the same reason you would target the person who egged your car 42 billion times on Halloween over the people who egged it once.
    ***Nonsense. If they’re going to go after any airline that receives any form of subsidies, then they must do so equally.

    “If they truly believe that these airlines are doing business illegally, then why does American continue to partner with both Etihad and Qatar?”
    Why does this matter? Really?
    ***It matters because they want to eat their cake and have it, too. They cannot rightfully claim illegal business practices but then profit from those exact same business practices.

    I appreciate your responding to some of Ben’s claims, but there’s nothing about this campaign that isn’t both laughably executed and poorly thought out. Ben and Gary (Leff) have some very pointed comments and responses to (nearly) all of the points made by the Fair Skies folks, yet the Fair Skies folks routinely refuse to counter those assertions. They *do* seem to continually play to the patriotic fervor and job-loss heart strings of consumers without providing factual documentation. That’s why it’s bogus.

  16. Very well-written post.

    It sounds like Americans for Fair Skies are actually Airlines for Fair Skies

  17. Completely agree Ben. Most of the US airline don’t know (a) what competition is and (b) what good customer-oriented service is. To say the US is a competitive marketplace ignores the hundreds of routes with a single carrier. Take ATL-BNA as an example. A 4-5 hour drive or 1 hour flight. Regularly costs over $750… and has been as much as $1,500. The reality is that there isn’t significant competition on many US domestic routes, due to the rules that (a) prevent foreign ownership and (b) prevent cabotage in the US. This stifles competition; it doesn’t promote it.

    You rightly call out the US airlines for that video. There were so many outright false, misleading or bending the truth statements that it made fake news look too normal for comfort.

  18. There’s a lot of hypocrisy around the C-series order too. Whether you think Boeing is right or wrong about Delta’s C-series order being facilitated by a Canadian government subsidy to Bombardier, Delta is crying about foreign subsidies hurting American businesses while patronizing (and one could argue directly propping up) a foreign business that is receiving subsidies to the detriment of a competing American business. (Again, that may not be true, but the optics point to Delta being self-serving and hypocritical.)

  19. Don’t all of the major US airlines have foreign call centers? How does that help American jobs?

  20. Here’s a fun drinking game: every time someone on the internet mispells “Etihad” as “Ethiad”, take a shot.

  21. Shoot, the first 30 seconds of that video got me excited. Investing in
    Lux airplanes
    cheap seats
    crushing (shitty) competition.
    Have at it I say. This is America, this is capitalism. If you’re not making money it’s because your product is bad, or you’re too expensive. If someone has a better product at a better price people have the right to spend their money on it.
    Then there’s the argument that are three airlines are even more subsidized than the gulf Airlines. Foot in mouth.
    Then there’s been so much acquisition that there’s only 3 players. Foot in mouth
    One of the US airlines spokesperson says they’re the crown jewel. Foot in mouth. #daviddao
    Delta is the most profitable airline in the world I think…not positive
    These guys are making asses of themselves.
    I’m all for it. Let em.
    As a consumer in regards to the airport coming in
    I’m all for it. Let em.
    I’d love to have option to fly any foreign airline domestically above our 3. As it is I avoid the big 3 persistently. I fly Southwest the most Jet Blue second.

  22. *our
    *Airlines
    So fired up over this…lots of typos but I think ppl can get the general message and where I stand

  23. @AdamR
    Do you not see the bias in demanding I provide numbers to prove that 500 planes on order are going to flood routes …but everybody seems just fine with the fact that the ME3 disclose nothing, nada, zilch.

    Or taking issue with the fact that “Fair Skies has refused to reveal how much of their donations come from “concerned Americans” but being perfectly fine with the ME3 who provide no tax returns to scrutinize, no quarterly 10Q’s no statements of equity?

  24. Great post Ben. We live in a post-truth society where “truth” is independent of factual reality and is instead dependent on those who can advocate perspectives with greatest clarity.

  25. @PD
    I’m not with any lobbying group. I hate the US carriers and their bullsht as much as the next guy. I’d like to shove hot needles under the nails of the American Airlines people who never make any routes available on points. And I love the work Ben and Gary do. I just have the (unfortunate for my popularity) mix of a heavy international finance background and having a conscience.

  26. I always had this idea of removing the majority US ownership requirment of airlines flying domestic. However, any domestic flight has to be a US flagged aircraft and be staffed and operated by US crew (to keep labor cost fair). This would let foreign airlines potentially have a US sub-fleet and could compete with the US3.

    The blowback I see on this would be the US3 moving some jobs outside the US for tax advantages (even though they seem to care so deeply about them).

    I haven’t put too much effort into thinking of any other possible issues. Most likely tons of holes. Just an idea.

  27. Facts. Thanks Ben, for presenting some.

    The reason we can’t have calm, rational, and productive debate anymore is that we’ve given screaming clowns on milk crates the same credence as quiet, learned, thinkers.

  28. @Jack, I think the issue many folks seem to miss about the aviation industry is that it is a strategic industry for national security. Similar to how we put limits on foreign ownership of ports, shipping hubs and financial institutions. These are industries which would put us at a strategic disadvantage if we were to lose them or allow them to go out of business. Allowing a foreign government to subversively undermine the financial health of our strategic industries cannot be allowed to happen.

  29. Wow! The uneducated manage to make the educated saying words to the uneducated which the educated himself know that the uneducated would not have the capacity to understand whatever the educated meant.

    So…. who is the smart one? Educated or uneducated? Lol

  30. How is a company that is made $1.85 BILLION of profit in 3 MONTHS!!!! be in any danger of going out of business??????
    These people are shameless. In danger of going out of business while generating GIGANTIC MASSIVE PROFITS?????

  31. you’re right Rob that it is impossible to feel bad for the airlines. That’s something they’ve done to themselves.

    It’s not like the ME3 are flying domestic US routes where the US airlines have monopolies and they are going to take over. Likewise they fly a very limited number of routes that are directly competitors to US carriers who have chosen not to even try to compete to the ME. What routes exactly are the ME3 taking away from the US carriers? And why would anyone want to fly a US carrier to get there anyway given the poor service and poor state of most of their fleets. How are the ME3 driving anyone out of business? There appears to be enough traffic to go around…although I understand that the Gulf carriers have been having some problems filling up all of those widebodies on some routes. And so they’ve been making schedule adjustments as any business would.

  32. Everybody this day and age loves a good protectionism — diffused harm, concentrated benefit for those few who are lucky enough benefit. It’s also the same people that would love a good old monopoly if they can get one.

    What a joke. Now we are down to 4 major airlines and they want even more. I do own some shares of LUV so I guess that part of me loves it. Because I saw this moat coming. Airlines don’t want competition anymore.

  33. @Rob

    It’s not biased at all. Since we’re using the basis of the US legal system here, it’s up to the plaintiff to make their case. That is, it’s up to the US3 to prove all of this. The ME3 don’t have to provide anything. If the US3 want to lob accusations, the onus is on them to provide factual evident to substantiate their claims. Thus far, I don’t feel they’ve managed to do that at all without playing to emotions with falsified or highly subjective accounting.

    To your other point, I’d counter with this: What markets are being flooded with those 500 planes? Are they markets currently served by the US3? Also, please define market. Are we talking 5th Freedom routes or are we talking direct flights? Or do we merely mean specific cities or regions being serviced. And to what degree are we measuring “flooding”? Tripling or quadrupling capacity? And how does anyone know that all 500 of those theoretical planes are for increasing seats on specific segments in an effort to flood the “market”, whatever definition we’re using, as opposed to replacing aging aircraft?

    I know that was a lot of rambling questions, but more to my point is that the US3 are throwing around a lot of buzzwords and industry terms without providing parameters on what they mean or how they’re measuring those. Further clouding the issue is that they’re tossing these words at people who don’t understand the industry or what those buzzwords mean or how to ask clarifying questions. It’s ultimately all disingenuous and misleading, in addition to being fallacious.

  34. From what I recall from reading your blog several years ago, you barely ever mentioned the gulf carriers when Etihad wasn’t an airline partner of American airlines nor Emirates before it became a partner of Alaska (I still remember how excited you were when BA rebooked you on an EK flight in F!)
    However, ever since it became possible to redeem AAdvantage miles and Alaska miles on gulf carriers, that’s pretty much when you mentioned/reviewed the gulf carriers.
    Anyways, that group definitely got free publicity from your blog since I never heard of them until now.

  35. “US airlines welcome competition”

    Everyone in the SilverKris lounge is staring at me as I roflmao.

  36. Reading this onboard QR727, DOH-PHL. The flight service manager just came by to welcome me onboard by name and thank me for flying Qatar. It was her second visit to my seat to welcome me because I was asleep the first time she came by. She wanted to know if the cabin was too hot as I was drinking water with ice. I’m OW Emerald, AA EXP, sitting in economy. Just one of the many reasons I choose Qatar over AA.

  37. Correct me if I am wrong but isn’t chapter 11 a form of Government protection/subsidy which all 3 US carriers have utilised in their race to the bottom?

  38. The problem with you is the only thing you selfishly truly cared about is being propped up in a luxury suite from a Gulf carrier sipping chmpagne

  39. Great post. The ME airlines provide a great service and buy a lot of aircraft produced in the U.S., benefiting US consumer and workers.

  40. Please keep pounding these lounatics. How many US Based jobs are added at Newark to hire Emirates ground staff to handle an additional flight? Probably quite a few? How many jobs are lost by US legacies? Little to none! 1,500? That’s more than a hub’s operation!

    US Carriers are at risk of running out of business? How? No non US Based airline is allowed to fly solely USA routes.

    Maybe American companies should invest more in their product, show more dedication to their craft, and then no one would want to fly on a Gulf carrier.

    Gulf Carriers are spending billions acquiring US made aircraft, and Delta doesn’t have a single order for a US made widebody, and they are complaining?

    These are things that disgust me about American Business….

  41. “I’m excited to see what Gary Leff has to say to this!”

    What is a “Gary Leff?”

    Wait. Don’t answer. Nobody cares…

    Ben, keep up the great work!

  42. Awesome post, Ben! Also, something that doesn’t get mentioned a lot are the joint venture agreements between the U.S. airlines and their European and Asian counterparts. While that may have made some sense when there were more U.S. airlines, after consolidation, it really has reduced competition and increased fares. If the U.S. 3 are really in favor of fair skies, let’s do away with these anti-competitive JVAs! Thank goodness for Norwegian and WOW, which are forcing the JVAs to be more honest in their transatlantic pricing. Interestingly, the U.S. 3 say they’re not worried about Norwegian. Is Level Airline part of the JVA?

  43. Excellent post, thank you very much. I am so glad that you are in a position to tell them what many of us think about them (US legacy airlines). I am 100% behind you on this (and many other things you have said in the past).

  44. Don’t worry Lucky, we got your back! This whole ME3 thing is such a joke…and these group of idiots targeting you are even more moronic. I fly about 100 to 150k a year (nothing compared to you but who does come close haha) and I have not flown a US airline in over 8 years…I absolutely refuse to…I am a cheap bastard but will gladly pay double if I have to in order to stay away from the garbage that is considered an airline in the US…and in case anyone is wondering.. yes I’m an American so it has nothing to do with nationality!

  45. What clowns they are. Keep up the work this blog is easily the best travel blog out there. The Big 3 airlines are a total joke to be behind this group.

  46. Well written post. Well, sort of.

    But, none of us should pretend (or believe) that Ben is an economist. His arguments filled with *simple* numbers are not complete science or sound logic. He is a marketing machine, just as the trade group that published the article is.

    As for the jobs, the trade group is not *simply* talking about jobs at American, Delta, or United. What they *intend* to reference are the overall employment stats of all industries which are linked to the airlines.

    Lastly, while American, Delta, and United may have a false argument, it is their duty to protect their own company and employees. I would only hope that all of our companies would do the same. I sure as heck hope that mine would.

  47. It seems to me that you need to become the founding member of Americans for Fair Blogging, an organization I’d be happy to run, for a small fee.

    -David

  48. The “Americans For Fair Skies” could be a front for a money laundry operation, considering they have cash transactions only, do not employ an external accountant, refuse to disclose the source of donations and shift money from those “donations ” to the private consultancy business of the director.

  49. This is better than the time Teresa Giudice flipped the table over on Danielle Staub. Don’t take any of their crap, Ben.

  50. Well done, “Americans For Fair Skies”, well done. Pick on someone who helps the slightly more than average traveler who’s looking out for himself. I appreciate what “Americans For Fair Skies” has done to bring the spotlight to their doorstep. Lucky, you expose many people who may not otherwise be aware of how things operate in the rest of the world. And for that, I applaud you.

    I live in the southern US, in the city where a certain airline operates a megahub. What this translates to is this ‘country friendly” airline gouges it’s hometown customer base to start our international and domestic trips in said city. Sure, it hurts, and I have other options. What chaps my rear is the simple fact that this airline complains about competition, scream about what can happen to the industry and jobs, while they single handedly lay the screw to their hometown base. This makes me wonder who they are really fighting for. I know it’s not me since I choose to connect, give my business to other domestic and international competitors and save a ton of money.

  51. Their piece was too funny! I am curious too where they come with this “1500 jobs lost” number as well, probably just pulled out of their asses. They really didn’t make a single point in their attack on you. Just bleated over and over their appeal to pure patriotism.
    Well Ben this means you’re seen as a threat to them otherwise they wouldn’t of attacked you. I wouldn’t have provided a direct link to them however, because not only free advertisement, considering your blog has a high Google PR, you just boosted their blog a notch or too.

  52. And what about the “Fly America Act”, according to some numbers, that’s as much as a $100 billion taxpayer funded subsidy to the US carriers? Notice the US airlines don’t complain about THAT lol.

  53. It’s funny how there is this myth that “all airlines outside of US” are government subsidised.

    British Airways might be the flag carrier for the UK (due to history) but being “British Airways” doesn’t mean it’s owned by Britain, just like American Airlines is not owned by America (or United States of America).

    A lot of airlines are named after the countries they were born but typically are commercial entities that everyone can invest into. Due to history many have government shareholders or the local laws may still require the government still to own x % of them (for a smaller country an airline is the largest fleet in the country). It doesn’t mean that the government is pouring money into them. The owner history is Chapter 11 for them, it may or may not protect them if things go really bad. The owner history or local laws can be a burden as well.

    Even if the owner is a national wealth fund, they are owners to make profit. While owning an airline may not be the greatest investment, that’s what they. That’s why US pension funds also invest in the US airlines.

  54. You can almost choke on the level of greed coming from US airlines. If they want to compete then they should provide a valid product. Instead they want to force people to use them because they are a US airlines. BS. They are simply companies that care about profits and don’t want competition hurting their bottom line. I could care less about them. They exploit and abuse their passengers and are making massive profits. lets not force the american people to have to always fly their subpar product. Oh and I am soo sure that the big airlines are supportive of new US airlines trying to start up, oh that’s right they try to run smaller airlines out of business if they become a threat to their profit margin.

  55. my dear friend, nationalism is illness. never mind democracy and tolerant society you’ve built everything is no more when you have stupid man who thinks he’s smart as a president, heck as a first commander. we are experiencing same autocracy and fake patriotism called ultra nationalism in several countries in Europe, it is not different comparing to nazzi Germany, next thing is plotting you some tax fraud and if that doesn’t work they will try to eliminate your life in the darkness of the night making it look like you were robbed or something. it doesn’t stop by itself, your fellow “americans” are to blame because they voted for the nationalism in majority, they voted for western saudi arabia in which you’re living right now just don’t realize yet. google a bit how all recent dictators in europe rose, how they got things done in case of journalists writing not so great about them, about members of the family who don’t agree with mr.dictator, about political opponents… they all were murdered. today, as we speak, you have full dictatorship in Hungary, Serbia, Belarus, Russia, Montenegro, Macedonia… just go and see how things are going there, it’s your future! better run from that hell!!!! I feel sorry for the good souls living in US and sorry for such great country to see it’s darkest hour in history!!!

  56. Let these people have it, lucky! Keep up the good work calling them out on their protectionist hypocrisy!

  57. Lucky I am too tired to read this lengthy article but just want to say you are the man. Expect the best and demand the best service always.

  58. The airline industry is riddled with subsidies both open and hidden. British Airways, to take an example, was a state-owned company for many years (massively loss-making), but for several decades has been a private company with no state subsidy.

    Except… Its hub is Heathrow, now also privately-owned but originally built with government cash, and still benefitting from government-provided infrastructure. Landing slots at Heathrow are far and away the most valuable in the world – and by an accident of history BA owns half of them. Need an odd $60million? BA just needs to sell a single pair of slots. And it has hundreds.

    Meanwhile, US carriers have protectionism of their domestic routes (no 5th freedom nonsense allowed in the competition-loving US of A); all public servants *required* to buy tickets on US airlines (we can’t allow the individual to choose, can we?); billions of debt erased through the state-provided Chapter 11 process; actual cash subsidies paid to US airlines on some routes; and US airlines leaping into joint-venture beds with other state-subsidised airlines like a drunken tart at an orgy.

    Special pleading is always ugly to watch. The US3 are in danger of moving beyond satire.

  59. US airlines assume price is the only reason why people choose to fly with the ME3.

    How about they improve their service (especially at the back of the bus), attitude of cabin crew, breadth and frequency of network?

    The lazy way of dealing with competition is to kick a fuss and accuse the competition of cheating.

    Provide a real reason for people to want to fly with you; not because they do not or have limited choices. Only pussies spit the dummy and kick a fuss.

    The likes of BA and LH embraced competition with the ME3 – Their markets are even more so exposed to the ME3. Are the bosses of US carriers suggesting that red-blooded Americans are pussies unable to deal with ME3 competition, unlike their European counterparts?

  60. If they thought this was a good idea, then they are sadly mistaken.
    This slander just adds on to their misleading campaign and wilful lies.
    They could haven taken the high road, but they have choosen the gutter.

  61. These Fair Skies buffoons are presenting the exact same arguments that Detroit used in the 70s and 80s when foreign manufacturers ran rings around the garbage produced domestically. Absent foreign competition, no doubt we’d still enjoy vehicles that crapped out at 80K and got 12mph.

    Does anyone believe UA, AA, DL would be upgrading their miserable ancient fleets or improving in-flight experience absent foreign competition? We all know the answer is a resounding no.

    Eff off Fair Skies and your corporate funding.

  62. @AdamR
    The 500 planes are on order by the ME carriers. You tell me where they are going to go into service. That’s the point. The ME3 don’t disclose their financial statements because it would show they have been running at a huge loss since their inception and then there would be no debate. Companies that were not massively subsidized by their governments would not be able to run losses for 30 years and then go to the capital markets to raise equity capital to buy 500 new planes (at even $400m a plane, we are talking about $200 billion). That is not competition. That is a foreign government crowding out our domestic private investment.

  63. Cheer up Ben, when corporate bosses start taking public shots at you, that means you’re on your way as a player. When you have to hire a lawyer to fend off lawsuits, then you will have made it to the big leagues. May the force be with you!

  64. Their article states 1,500 jobs are lost per route lost, yet the front page of their site states 800. Seems like sound statistics!

  65. @KSUTrav Great point re protectionism at Delta’s ATL hub – so much so, they’ve got an agreement with Atlanta that there will not be a Northern ATL airport, despite how much benefit that would bring (competition, prices for the average traveler, huge reduction in downtown traffic and the direct economic benefit that comes from that etc)

  66. “In the interest of full disclosure, I’ve never been paid a single dime from a US carrier or Gulf carrier.” Aha! I knew you were in Lufthansa’s pocket!

    For real though, great post.

  67. Thank you, thank you, thank you.

    “If we, as a nation, don’t take action to stop these subsidies, airline jobs will go the way of the maritime industry and rapidly disappear” ***face palm***

    Who is writing this crap? This kind of writing is what you would expect from a fifth grader.

    Keep it up, and keep up the laughs!

  68. What about the billions that Delta received when they filed for Chapter 11 bankruptcy? Also Delta has 80,000 total employees. So that means if it takes 1,500 jobs to run a route, Delta only runs 53 airline routes. Doesn’t seem to add up there.

  69. As for being “financially supported by thousands of concerned citizens,” their tax return suggests otherwise. According to the return, they are required to complete Schedule B, which is usually completed by exempt organizations to disclose substantial contributors. Frustratingly, that schedule isn’t required to be published to protect the identities of those contributors.

  70. Read: “….$1 million went to the president’s consulting company…”
    Stopped reading and made note to myself: F*ck You US carriers! Never never never (if avoidable) I’ll fly with you!

  71. Ben, this is B.S. I’m a DC-based reader and a pretty good public affairs professional. From this post, it doesn’t look like you need much help, but happy to be a D.C. sherpa for you if needed.

  72. @Ben, great article resulting from sound critical and analytical reasoning. One question for you, when is Gary going to walk over his ‘Thought leader in travel’ tag line and surrender it to you? 😉 lol

  73. This is great stuff. Truth and counterpoints.

    I’m still baffled that you support airlines who, if they had the choice, would make Sharia Law the rule of the world.

    Maybe tackle that in another blog entry?

  74. Just so you know, the organization which has criticized Lucky on this issue is NOT the one that the US airlines are supporting. That’s the Partnership for Open & Fair Skies (an entirely different group).

    http://www.openandfairskies.com/about-us/

    I believe that the group doing the criticizing is the one founded by the airline labor unions.

    So it is definitely not Delta, United and American “criticizing” Lucky’s columns. Honestly, they wouldn’t bother to do so. They know a lot of the travel bloggers are biased due to the lucrative travel rewards they receive on the Mideast airlines, and wouldn’t expect them to have a full understanding of what is so terribly wrong with the way those airlines do business.

  75. Well done. I wonder when they’ll start taking on Norwegian. And who knows which other carriers will be targeted by this lobby….

  76. The cut and paste behavior has been extended to the airline flight crews and staff. In conversations with various pilots recently, it’s word for word “illegal subsidies” for the ME3 and so forth. They didn’t seem to be aware of the billions a year in tax credits and incentives and development subsidies from US local, state and federal governments for aircraft manufacturing, airport expansion, plant relocation and so forth.

    It’s also odd how hostile many of these employees are towards their employers. I mentioned to one cabin crew that I’d been flying on American since I was 8 years old, and her comment was “I’m so sorry”. Not exactly a poised response…

  77. I am trying to keep pace with the vast
    Weight of coments coming in but firstly Ben this so amazing. And be proud, standing up to these corporate hacks!

    2 (the maritime reference) – I work in the dry bulk freight shipping markets -has no one else seriously looked at this??? The exact reason that our globe-leading merchant navy collapsesd was because a cosyset of US firms lobbied for the “jones act” of 1920 which barred all foreign flag careers from cabotage between US ports and mandated as well that all US shippers had to construct their vessels within the US. The net effect was a collapse through bankruptcy of almost every major US cargo line. Paired with this absurd requirement of running high cost, money losing routes through the Pacific on heavy old liberty freighters that no one else would ever buy. This protectionist act, which gutted our once majestic and globe-leading marine fleet directly ended US merchant dominance of the oceans. There is no debate about this within the shipping industry – you have a problem go have Mitsui or Sumitomo explains this is basic terms – we killed ourselves.

    https://en.m.wikipedia.org/wiki/Merchant_Marine_Act_of_1920

    Now Delata is actually citing that as a reason to enact a similar policy? Have they taken their meds today?

    Really there could be no clearer example of protectionism
    Killing our industries.

  78. Continuing my last rant for one more paragraph, I remain so unclear at what this ultimate message is.

    The policies they would encourage – have no doubt – would shortly cost 10s if not hundreds of millions in costs to wind down aircraft production while costing untold jobs. And simultaneously taking more from consumers. Please do not go down the maritime route we learned from
    This and the lesson was not to allow greedy monopolies total contal of any infrastructure.

  79. My experience flying the American legacy carriers vs foreign airlines tells me they need the competition because the hard and soft products suck in both eco and biz. I recently took an NZ flight between AKL and NAN in straight up steerage and it really reinforced for me how horrible flights are domestically in America. The air New Zealand flight was amazing with cheerful, helpful staff, decent seats, and a good ground experience. We couldn’t stop talking about how good it was for a coach flight in the back 1/3 of the plane.

  80. Excellent post and keep at it! All you have to do is fly any foreign airline just once and you can see the difference between “us” and “them.” I’m on a trip right now and flew Turkish Air a couple days ago and those FA’s had a complete meal service in 40 minutes! Their time was cut short because of turbulence. They were running in order to serve us AND did it with a smile (which costs nothing btw). Our airlines in the USA are an embarrassment at times.

  81. Remind me the 80s when we burned Toyotas, Mazdas and Nissans in public square. Because they took American jobs!

  82. I have always been an admirer of Delta among the big the three carriers. Their recent strategies and innovations have shown them to be innovative, customer centric while being very commercial and cost centric and thereby sustainable unlike the MEE carriers. I truly fail to comprehend why they are leading the offensive when they have so much to fight them with. For instance, network effects- they have a range of partnerships and a frequent flyer program that makes their proposition way more compelling to any US based or international corporation who ultimately value connectivity. They offer a guaranteed flat bed product mostly with direct asile access on all those Wide body intercontinental aircrafts- unlike emirates and qatar. Notably their biggest trump card is their economy seating that still offers 9 abreast in economy with decent legroom and an affordable extra legroom upgrade option. Surely, they can counteract Emirates by saying that their superior proposition is not limited to celebrities who fly their premium cabins but to the majority of flyers in coach who are afforded more humane accommodations on long haul flights. The fact that Delta is making record profits while the MEE carriers are questioning the viability of their excesses clearly validates their business model. I fail to understand therefore the reasons behind this screechy xenophobic rant that they are indulging in. Frankly, Delta came across as a modern and cool brand to me while their recent evangelical tantrums are making them seem like insecure red necks which is actually doing them a disservice. While they accuse the gulf carriers of indulging in ego and power displays such as Qatar flying empty planes to Atlanta, the reality is that their own rant makes no commercial sense and seems to be fuled by their CEO getting provoked by the juvenile tirades of Al Baker. In doing so, they are unwittingly drawing the spotlight on their own shortcomings versus highlighting their strengths.

  83. And another thing…for all their crying about not flying to India, the fact is that they do offer efficient one stop connectivity to india between a large number of city pairs at both ends due to their partnerships- latest being jet airways that is flying to Amsterdam from 4 Indian gateways in addition to KLM, Air France and Virgin Atlantic.

    if fares to India are so unviable, then how is it that United is able to turn a profit on its New York to delhi non-stop when they actually have a higher CASK then Delta? They can just as easily launch services from JFK. It seems like they missed the boat here and are now crying over spilt milk like overgrown babies.

  84. They’re lobbyists, a group whom in my estimation rate very lowly on the credibility sale. They’re paid mouth-pieces; intellectually prostitues, if you like; and $1M for nine months work is a spicy blood meatball.

  85. Read this post, ironically, on a Delta flight CDG-PHL. Opened the Delta Sky magazine right to an entire page-sized, Delta-sponsored “advertisement” about all those 1500 American jobs per route being lost. Me and the fiance had a good laugh, and then entertained ourselves with the fantastic comments on this post.

    Let’s face it: it’s not about American jobs, because we know that the first chance they had, the big three would bust unions, pay flight attendants as little as possible, and eliminate whatever competition they could. It’s a way of trying to give themselves an edge on the market while also getting themselves some good press. (same with the video they make you watch before every piece of entertainment on a Delta flight about how they donate money to charities, which of course barely takes anything out of their profits). And though the service wasn’t *bad* on the flight, it was nothing compared to the service I got on my Virgin flight two weeks earlier.

  86. Very well argued, lucky! For once I’m agreeing on you with Boeing vs. Airbus! Delta does need to shape up their orders if they want to complain! but so do United and American, also big airbus customers, and then there are the other US airbus customers, like Spirit, Frontier, JetBlue and Virgin. Honestly, if they want to shoot, they should make sure that they aren’t at the other end of the gun!

  87. Terrific presentation of the issues and your position, Ben. Great analysis. Thank you, and Bravo!

  88. I’m surprised the PR firm that’s behind this “grassroots group” hasn’t flooded this post with negative comments yet- perhaps that is coming.

  89. Oh Lucky! You really are expecting a lot!
    How can you fight “fake news” and “fake facts” with honesty, integrity and truth?
    Bravo for a written Blog.
    Hopefully more people read it and step up and spread the facts as you have.
    Congrats for having the “kuhonas” to stand up to those who will disseminate garbage to further their own agenda.

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